Goldman Sachs reports that hedge funds and mutual funds have significantly increased their investments in financial stocks during the second quarter, reaching the highest levels in the firm's historical data. Hedge funds raised their net exposure to financials by over 300 basis points, marking the largest position since before the 2008 financial crisis. Mutual funds also increased their overweight in the sector, the largest since at least 2012. This convergence occurs even as investors remain divided on the AI trade.
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